Destination XL Group and FullBeauty Brands have entered into a definitive agreement to combine in a merger of equals that the companies said will create a scaled, category-defining retailer focused on inclusive apparel across plus-size women and Big + Tall men. The deal is structured as an all-stock transaction and is expected to close in the first half of Destination XL’s fiscal year 2026, subject to customary closing conditions and approval by Destination XL shareholders.
The companies said the combination will create one of the largest omni-channel retailers across the full inclusive sizing market, with approximately $1.2 billion of combined annual net sales for the last twelve months ending October 2025. On that same basis and assuming no pro forma adjustments, the companies said Adjusted EBITDA was approximately $45 million. The companies also expect $25 million in annual run-rate cost synergies by 2027, and said a significant portion of those actions are expected within the first 12 months after closing. Including the expected cost synergies, the companies said the combined company would have generated approximately $70 million of LTM Adjusted EBITDA.
The combined company will bring together Destination XL’s Big + Tall men’s specialty retail footprint and brand partnerships with FullBeauty’s direct-to-consumer portfolio spanning women’s and men’s inclusive sizing, including its KingSize brand. The companies said the combined business will have a direct-to-consumer mix of 73% of total sales and bricks-and-mortar at 27%, with a multi-channel strategy intended to improve the customer experience and broaden access to fit-focused apparel across value and premium tiers.
The companies framed the merger as a way to capture growth in a large, underserved, and fragmented market. They said the combined company will have approximately 34 million households in its combined customer database and 296 stores, and plans to use expanded first-party data and analytics to improve personalized marketing, inventory decisions, and customer lifetime value. The companies also pointed to potential commercial upside from cross-brand and cross-channel traffic, along with capabilities such as marketplace infrastructure, print marketing, and private label credit expertise.
On integration and sourcing, the companies said they expect synergies primarily from cost-of-goods optimization, organizational efficiencies, and reduced overhead expenses, and that a unified sourcing strategy will provide greater scale advantages while maintaining the agility to adjust sourcing operations to mitigate tariff exposure. The companies said the combined platform will be positioned to support customers through weight-fluctuation journeys, including those using GLP-1 medications, referencing Destination XL’s FiTMAP and FullBeauty’s free exchange program.
Following completion, FullBeauty and Destination XL shareholders will own 55% and 45% of the combined company, respectively, with Destination XL remaining the publicly traded entity under the ticker symbol DXLG. The companies said that at closing, certain FullBeauty equity and debt holders will complete a committed subscription of $92 million through the sale of common stock in exchange for a combination of new equity and outstanding debt equitization, resulting in a term loan outstanding at closing of approximately $172 million with a maturity of August 2029.
Leadership of the combined company will include Jim Fogarty, current CEO of FullBeauty, as Chief Executive Officer, and Peter Stratton, current CFO of Destination XL, as Chief Financial Officer. Headquarters will remain in Canton, Massachusetts, and the company expects to maintain a significant presence in New York City, Indianapolis, and El Paso. Governance will include a nine-member board with four directors appointed by FullBeauty, four by Destination XL, and one independent director to be mutually agreed upon prior to closing.
Both companies’ boards have unanimously approved the transaction. Destination XL said it has entered into voting support agreements with Fund 1 Investments LLC and each member of its board, representing approximately 19.4% of Destination XL’s existing voting shares, to vote in favor of the transaction.
KEY QUOTES:
“We are excited about what this transaction means for our associates, customers and shareholders. Together with FullBeauty, we will be better able to serve our customers across the plus-size and Big + Tall apparel market, providing them more brands, more styles and more options whether they shop in stores or online through our powerful omni-channel platform. Our shareholders will benefit from the upside potential of our large, combined company as we capture growth opportunities, leverage our Fit expertise, execute on cost synergies and use our enhanced financial position to invest in our business. We look forward to working with FullBeauty and joining our teams to deliver on the promise of this combination.”
Harvey Kanter, President and CEO of DXL
“By uniting DXL and FullBeauty we are creating a leader in a fragmented market that will define the next decade of inclusive fashion. Together we will be a powerful engine for innovation — combining data science, digital scale, proprietary fit technology and differentiated store expertise. With our shared values and mission, incredible portfolio of brands, complementary capabilities, enhanced financial profile, proven record of successful brand integrations and the scale of a larger public company, we expect to deliver sustainable growth, stronger margins and long-term shareholder value — while expanding choice for customers in an apparel category that has historically lacked options.”
Jim Fogarty, CEO of FullBeauty and Incoming CEO of the Combined Company
“Following a comprehensive review of this transaction, the Board determined that this combination has the potential to create significant value for and is the best path forward for DXL shareholders. We look forward to working together to guide the combined company to even greater success as one organization.”
Lionel Conacher, Chairman of the Current Board of DXL
“As the largest individual owner of FullBeauty, we look forward to participating in the significant upside potential this transaction creates. Pro forma for cost synergies, we expect the combined company will generate solid free cash flow and generate very attractive shareholder returns. We are excited for the opportunity for value creation ahead as FullBeauty and DXL join forces to create a leader in inclusive apparel to pursue the vast and growing market opportunity.”
Steve Tesoriere, Portfolio Manager of Funds Managed by Oaktree Capital Management, L.P. and Director of FullBeauty
